Joint Circular No. 39/2010/TTLT-BLDTBXH-BTC guiding the payment of retirement and survivor benefits from the mandatory social insurance fund and the voluntary social insurance fund for individuals who have both mandatory and voluntary social insurance periods.

JOINT CIRCULAR

Guidelines on the payment of retirement and survivor benefits from the mandatory social insurance fund and voluntary social insurance fund for individuals who have both participated in mandatory social insurance and voluntary social insurance with periods of participation in mandatory social insurance and periods of participation in voluntary social insurance

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Pursuant to Article 30 of Decree No. 190/2007/NĐ-CP dated December 28, 2007 of the Government guiding certain provisions of the Social Insurance Law regarding voluntary social insurance (hereinafter referred to as Decree No. 190/2007/NĐ-CP);

Pursuant to Decree No. 186/2007/NĐ-CP dated December 25, 2007 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Labor - War Invalids and Social Affairs;

Pursuant to the Decree No. 118/2008/NĐ-CP dated November 27, 2008 of the Government stipulating the functions, tasks, powers, and organizational structure of the Ministry of Finance;

The Ministry of Labor, Invalids and Social Affairs and the Ministry of Finance issue guidelines on the payment of retirement and survivor benefits from the mandatory social insurance fund and voluntary social insurance fund for individuals who have periods of participation in both mandatory and voluntary social insurance before enjoying social insurance benefits as follows:

Article 1. Applicability

The scope of application includes the retirement and survivor funds of the mandatory social insurance and voluntary social insurance funds responsible for paying retirement and survivor benefits to individuals who have both participated in mandatory social insurance and voluntary social insurance.

Article 2. Responsibilities for payment and transfer of funds between the funds

1. The social insurance fund in which the worker participates immediately prior to enjoying retirement and survivor benefits shall be responsible for paying such benefits.

2. The social insurance fund that does not make payments shall be responsible for transferring the amount of contributions made by the worker to the social insurance fund responsible for making payments.

3. The amount to be transferred between the two funds for each worker shall be determined at the time of calculating the entitlement to retirement or survivor benefits.

Article 3. Determination of the amount contributed to the mandatory social insurance fund and the voluntary social insurance fund by each worker 1. The amount transferred from the mandatory social insurance fund to the voluntary social insurance fund for payment to the worker is calculated using the following formula:

Cbb = Ti x Mbqtl,tc x Ki

Cbb: Total amount transferred from the mandatory social insurance fund to the voluntary social insurance fund;

Where:

Ti: Total number of months contributed to the mandatory social insurance fund during each corresponding period based on contribution rate Ki;

Mbqtl,tc: Average monthly salary or wage used as the basis for calculating social insurance benefits according to Decree No. 152/2006/NĐ-CP dated December 22, 2006 of the Government;

Ki: Monthly contribution rate of the worker and employer to the retirement and survivor fund according to the regulations of each period, specifically:

Period of social insurance contribution

Example 1- From January 1992 to December 2010 (19 years), working in the public sector with an average monthly salary or wage for mandatory social insurance contributions as the basis for calculating social insurance benefits being VND 3,000,000.

- From January 2011 to December 2011 (1 year), Mr. A participated in voluntary social insurance.

In January 2012, Mr. A met the conditions to enjoy monthly retirement benefits. Since he was participating in voluntary social insurance before enjoying retirement benefits, the voluntary social insurance fund is responsible for paying retirement benefits to Mr. A. The mandatory social insurance fund is responsible for transferring the amount of mandatory social insurance contributions to the voluntary social insurance fund. Therefore, Mr. A has:

- A period of mandatory social insurance contributions before January 2007 of 15 years, equivalent to 180 months with a rate K1 = 15%;

- A period of mandatory social insurance contributions from January 2007 to December 2009 of 3 years, equivalent to 36 months with a rate

- A period of mandatory social insurance contributions from January 2010 to December 2010 of 1 year, equivalent to 12 months with a rate K₂= 16%;

The amount that the mandatory social insurance fund is responsible for transferring to the voluntary social insurance fund is calculated as follows: K₃= 18%;

(180 months x VND 3,000,000/month x 15%) + (36 months x VND 3,000,000/month x 16%) + (12 months x VND 3,000,000/month x 18%) =

VND 104,760,000 Thus, Mr. A receives his pension from the voluntary social insurance fund. The mandatory social insurance fund must transfer a sum of VND 104,760,000 to the voluntary social insurance fund.

2. The amount transferred from the voluntary social insurance fund to the mandatory social insurance fund for a worker is calculated using the following formula:

Ctn = Tj x Mbqtn x Kj

Ctn: Total amount transferred from the voluntary social insurance fund to the mandatory social insurance fund;

Where:

Tj: Total number of months of voluntary social insurance contributions corresponding to contribution rate Kj; Mbqtn: Average monthly income for voluntary social insurance contributions as the basis for calculating social insurance benefits according to Decree No. 190/2007/NĐ-CP;

Kj: Monthly contribution rate to the retirement and survivor fund according to the regulations of each period, specifically:

(Before January 2008 is the period of social insurance contributions applicable to the subjects specified in Decision No. 41/2009/QĐ-TTg dated March 16, 2009 of the Prime Minister on transferring social insurance for farmers in Nghe An province to voluntary social insurance).

Mrs. B has the following work history and social insurance contribution record: - From January 1990 to December 2006 (17 years), working in the public sector and participating in mandatory social insurance.

Example 2:- From January 2008 to December 2010 (3 years), Mrs. B participated in voluntary social insurance with an average monthly income for voluntary social insurance contributions being VND 1,500,000.

- From January 2011 to December 2011 (1 year), Mrs. B worked in a private enterprise and participated in mandatory social insurance.

In January 2012, Mrs. B met the conditions to enjoy monthly retirement benefits. Since she was participating in mandatory social insurance before enjoying retirement benefits, the mandatory social insurance fund is responsible for paying retirement benefits to Mrs. B. The voluntary social insurance fund is responsible for transferring the amount of voluntary social insurance contributions to the mandatory social insurance fund. Therefore, Mrs. B has:

- A period of voluntary social insurance contributions from January 2008 to December 2009 of 2 years, equivalent to 24 months with a rate K2 = 16%;

As of January 2012, Mrs. B meets the conditions to receive monthly pension benefits. Since she was participating in mandatory social insurance before receiving pension benefits, the mandatory social insurance fund is responsible for paying the pension benefits to Mrs. B. The voluntary social insurance fund is responsible for transferring the amount paid for voluntary social insurance to the mandatory social insurance fund. Therefore, Mrs. B has:

- A period of voluntary social insurance contributions from January 2008 to December 2009, totaling 2 years, equivalent to 24 months with a rate K2 = 16%.

- The period for voluntary social insurance contributions from January 2010 to December 2010 is one year, equivalent to twelve months with a rate K3 of 18%;

The amount that the voluntary social insurance fund is responsible for transferring to the mandatory social insurance fund is calculated as follows:

(24 months x 1,500,000 VND/month x 16%) + (12 months x 1,500,000 VND/month x 18%) = 9,000,000 VND.

Therefore, Ms. B receives her pension from the mandatory social insurance fund. The voluntary social insurance fund must transfer a sum of 9,000,000 VND to the mandatory social insurance fund.

Article 4. Method of transferring funds between funds

1. Based on the amount of contributions of each worker determined according to the provisions of Clauses 1 and 2 of Article 3 of this Circular, the social insurance organization determines the total amount that the mandatory social insurance fund must transfer to the voluntary social insurance fund and vice versa.

2. The transfer of contributions into the retirement and death benefit fund of the mandatory social insurance fund to the voluntary social insurance fund and vice versa shall be carried out once a year.

Article 5. Implementation

The Vietnam Social Security implements according to the guidelines set forth in this Circular.

Article 6. Implementation Provisions

1. This Circular shall take effect 45 days from the date of signature.

2. During implementation, if there are any difficulties, please report to the Ministry of Labor, Invalids, and Social Affairs for study and resolution.